Homeowners are to be given the freedom to build extensions, add an extra
storey to their properties and install a driveway without planning
permission, under radical Government proposals.

Ministers want to give neighbourhoods the right to take over many of the planning responsibilities held by local councils.

The plans are expected to enable householders to redevelop their properties without having to deal with the red tape that can delay and hinder them.

Residents will also be given the power to approve or reject proposals for new housing developments, schools and other public buildings in their areas.

The plans form part of the forthcoming Localism Bill, to be published within days by Eric Pickles, the Communities and Local Government Secretary. The Bill is a major element of the Government's plan for the Big Society.

Ministers believe the planning system is too bureaucratic. Last year local authorities spent 13 per cent more in real terms on planning than they did five years previously, despite a 32 per cent drop in the number of applications.

Greg Clark, the minister for decentralisation, told The Sunday Telegraph: "This Government has ambitious proposals to make the [planning] system fit to meet the challenges of the 21st century. Above all, we want to change the philosophy behind local planning. We want to move away from a system with significant elements of imposition from above, to one with participation and involvement at its heart – not just warm words, or a commitment in principle, but real opportunities for people to have a say.

"We also want to move away from a system that seeks to resolve the different needs of different groups at a local level by imposing choices from above, towards one which enables a mature debate at local level."

The provisions of the Localism Bill are expected to allow groups of householders to apply to become "neighbourhoods" with defined boundaries, based on existing groups of streets or larger areas. There would be a "presumption" that local authorities would officially recognise these new neighbourhoods.

Once established, residents could prepare "neighbourhood plans" which would be voted on in local referendums. If approved in these votes, the plans would have to be accepted by local authorities.

They would also be able to draw up agreed lists of categories of developments – in so-called "neighbourhood development orders" – that individual householders could carry out without the need for planning permission.

Examples could include extra storeys, conservatories, loft conversions and other extensions, front driveways and wind turbines. Neighbourhoods which approve housing developments would become the recipients of financial "incentives" provided by Whitehall, which could include council tax rebates.

They would, not, however, be able to break national planning laws or ban large-scale projects, such as high-speed rail links or new nuclear power stations, from their areas.

Other features of the Localism Bill are likely to include measures to pave the way for elected mayors in 12 cities: Birmingham, Bradford, Bristol, Coventry, Leeds, Leicester, Liverpool, Manchester, Newcastle-upon-Tyne, Nottingham, Sheffield and Wakefield. The Bill is also likely to be the vehicle for the abolition of Regional Development Agencies.

It will also get rid of controversial "conflict of interest" rules for local authorities which have seen councillors being told not to share the same car when travelling to planning meetings.

A "code of conduct" put in place by John Prescott, the former deputy prime minister, was designed to apply in cases where councillors might have a personal or professional interest in the issues being debated. It was enforced by monitoring officers in each council, and ultimately by the Standards Board for England.

However, it has led to thousands of complaints described by Coalition sources as "petty and malicious". The Standards Board alone costs £8 million a year to run.

The planning reforms build on, and go far further than, those introduced under Labour.

In 2006, local authorities were told to allow more building within greenbelt boundaries to ease the housing shortage. Councils were also told they should usually fast-track plans for simple home extensions, although these can still face considerable delays, particularly if neighbours complain.

While seeking to free up the planning process, the Coalition has scrapped moves that allowed back gardens to be classified as brownfield sites and made it easier to build on them.

It has also ditched "minimum density targets" which stipulated that at least 30 homes be built on every hectare of land to be developed, making it almost impossible for large-scale developers to win planning permission to build bigger homes and gardens.